One of the consequences of the imminent changes to the fees regime is to turn strategic planning from a nice idea into a practical necessity. First of all, the effective fee caps will mean that poor work execution will be even more costly than it was. Secondly, the RPBs will quickly penalise firms that aren’t able to demonstrate that their fee estimates are based upon a rational plan for the work.
Unfortunately, I don’t think many firms’ planning and review systems are fit to meet these new requirements successfully. The ones most at risk are those who have no standard planning documents at all, but even amongst those that have, most are still using “single issue” media – paper notes or word templates for both the planning and subsequent reviews, rather than flexible data systems like Excel where all information can be easily carried forward and updated as you go, in a single package.
For those of you who haven’t the time or inclination to work up your own such system I am, as always here to help; for those with the time, here are a few pointers –
- The initial strategy document should be in a standard form that includes all the usual case metrics – name, type, trade, introducer, principle contact – but also a summary of anticipated recoveries, investigation areas and close-review areas, such as trading, potential onerous property, tax investigations, etc.
- The initial strategy should also include a projected “budget” for the case. If designed in Excel, it can be linked to or be the basis of the estimated outcome statement that should be the backbone of any fees estimate, giving a projection of dividend prospects, if there are any.
- Crucially, you should be trying to complete the initial strategy in advance of appointment, at least to first draft stage. It can therefore provide a ready reminder to all staff involved in the case as to pre-appointment requirements (e.g. get the pre-appointment fees in, notify charge-holders, secure the books and records, complete pre-appointment due diligence, etc.) as well as what you expect to do post -appointment, And you can also indicate the timings of critical elements of the work to be done, such as a review of accounts.
- The form should, as far as possible, be something that can be easily referred to in subsequent reviews, meaning that there is an available audit trail for all critical decisions in the case. This is where an excel based system will score heavily over paper or Word documents – figures from projections, initial and review comments can all be set up so as to feed into later documents.
- Put the strategy document wherever it can be easily accessed from the file – at the front of a paper file or in its own designated folder in a “paperless” system.
There are extra benefits to good strategic planning. These mainly revolve around that tricky business of delegating work to more junior members of staff. The test of a well-designed system will be the extent that it encourages your staff to take ownership of the case. Try to get the administrator, rather than you or the manager, to fill in the strategy document perhaps in, or after a meeting with you. Once completed, either you or the manager can review, amend or add to it and then print off a copy for signature. From that moment forward, everyone in the team will be aware of all the things that need to be done and when. They will be that much more aware of the time available to spend on preliminary investigations, creditor claims and so on and they can directly populate their diary with key dates for specific tasks, well in advance of execution. This shoud mean that more of the work is being done at lower charge-out rates, where the leverage to actual salaries should be greater, yielding better profits with (hopefully) less aggravation.
As you may gather, I am a real fan of this kind of system and have done work on two or three over the years and have developed a generic package that can be adapted to any practice. To take things further or just have a chat about what’s possible, call or drop me an email.